Nvidia CEO Unveils New Tech to Keep Global AI Expansion Going
Chief Executive Officer Jensen Huang on Monday kicked off Computex in Taiwan, Asia's biggest electronics forum, touting new products and cementing ties with a region vital to the tech supply chain. His company's shares are riding a fresh rally following a dealmaking trip to the Middle East as part of a trade delegation led by President Donald Trump.
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AI Is on Sale: 2 Stocks Worth Buying Before the Next Surge
Key Points One of the companies discussed in this article is using AI to win a bigger share of the lucrative digital advertising market. The other company in focus in this piece is enabling the AI revolution through its semiconductor manufacturing equipment, and it seems well-positioned to accelerate its growth. 10 stocks we like better than Meta Platforms › Artificial intelligence (AI) is projected to have a profound impact on the global economy in the long run by driving up productivity levels, spurring customers and businesses to spend money on AI-related applications. According to market research firm IDC, AI could account for 3.5%, or almost $20 trillion, of the global gross domestic product (GDP) by the end of the decade. This explains why investors have been betting big on AI stocks over the past three years, and that's why many of the names benefiting from the rapid adoption of this technology are now trading at expensive multiples. Hardware giants such as Nvidia and Broadcom sport rich earnings multiples, while software specialists such as Palantir and Snowflake are also expensive. However, if you have missed the AI-fueled rally in shares of the above-mentioned companies in the past year, it would be a good time to take a closer look at Meta Platforms (NASDAQ: META) and Lam Research (NASDAQ: LRCX). These companies are making the most of the global AI rollout, and importantly, they are trading at attractive multiples right now. Let's look at the reasons why buying these two AI stocks right now could turn out to be a smart long-term move. 1. Meta Platforms AI is turning out to be a nice catalyst for digital advertising giant Meta Platforms, which has been offering its AI-powered advertising tools to advertisers and brands to improve audience targeting and reduce costs simultaneously. On the company's latest earnings conference call, management pointed out that AI tools have led to a 5% jump in ad conversions on Instagram, along with a 3% improvement on Facebook. Moreover, Meta's users are now spending more time on its apps thanks to AI-powered content recommendations. The time users spent on Facebook and Instagram increased by 5% and 6%, respectively, in the previous quarter. These factors explain why Meta reported a solid increase of 22%, to $47.5 billion, in its Q2 revenue. Its bottom-line growth was even better, with adjusted earnings per share jumping by 38% year over year to $7.14 per share. The numbers crushed Wall Street's expectations, fueling a big jump in Meta's stock price following the release of its results on July 30. Meta benefited from a 9% year-over-year jump in the average price per ad served during the quarter. Also, the AI-driven improvement in user engagement led to an 11% increase in ad impressions delivered by the company in the previous quarter. Additionally, more advertisers on Meta's platform are now using its generative AI ad tools to create and optimize the performance of their campaigns. Meta says that almost 2 million advertisers are now using its AI video generation tools, while the adoption of its text generation tools is also improving. Looking forward, Meta's AI ad tools are likely to be adopted by more advertisers, as the company reports they significantly boost advertising returns. A study conducted by the company earlier this year revealed that its AI advertising tools are delivering a "22% improvement in return on ad spend for advertisers." It won't be surprising to see advertisers funneling those savings back into Meta's advertising solutions to reach a bigger audience, thereby leading to further growth in the social media giant's revenue and earnings. As such, it is easy to see why analysts have increased their earnings growth expectations for Meta. The best part is that investors can buy this tech stock at an extremely attractive 27 times earnings, which is lower than the tech-laden Nasdaq-100 index's earnings multiple of almost 33. Buying Meta at this valuation looks like a no-brainer, as the company can gain a bigger share of the digital ad market thanks to the AI-powered gains it is delivering to advertisers. 2. Lam Research Semiconductors are powering the AI revolution. Complex chip systems capable of tackling huge workloads are necessary to train and deploy AI models in data centers. This is why companies such as Nvidia, Broadcom, AMD, and Taiwan Semiconductor Manufacturing Company (TSMC) have seen healthy growth in their revenue and earnings in the past couple of years. However, the chips that the companies mentioned above design and fabricate wouldn't have been possible without the semiconductor manufacturing equipment sold by the likes of Lam Research. The company sells wafer and fabrication equipment (WFE) to foundries such as TSMC and Intel and to memory manufacturers like Samsung, Micron, and SK Hynix. These companies have been increasing their capital expenditure budgets to make more AI-focused chips. Unsurprisingly, industry association SEMI is projecting a 6.2% increase in WFE spending in 2025, followed by a bigger jump of 10.2% in 2026. It is worth noting that SEMI increased its WFE spending guidance last month. The good part is that Lam is already benefiting from the improved spending on semiconductor equipment. The company released its fiscal 2025 results on July 30. It reported a 23% year-over-year increase in annual revenue to $18.4 billion. Its diluted earnings per share increased at a faster pace of 43% to $4.15 per share last fiscal year. The stronger WFE spending forecast going forward explains why Lam's outlook was a solid one. It is expecting $5.2 billion in revenue in the current quarter, which is well ahead of the $4.63 billion consensus estimate. That would translate into a year-over-year increase of 25% in its top line. Lam seems capable of sustaining this healthy momentum throughout the year on the back of an increase in AI-focused semiconductor capacity. As such, don't be surprised to see Lam's revenue growth in the current fiscal year exceeding the 8% increase that analysts are projecting. The following chart tells us that Wall Street analysts expect Lam to clock healthy double-digit earnings growth rates. That looks reasonable, considering the 24% annual growth that the AI chip market is expected to clock over the next five years, which should ideally lead to more investments in semiconductor manufacturing capacity. In the end, there is a possibility that Lam will grow at a stronger pace than Wall Street's expectations in the long run, and this should pave the way for more upside in this AI stock. With Lam trading at just 23 times trailing earnings, investors are getting a great deal on this stock right now, and they may not want to miss it, considering the AI-fueled gains it could deliver. Should you buy stock in Meta Platforms right now? Before you buy stock in Meta Platforms, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Meta Platforms wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $636,563!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,108,033!* Now, it's worth noting Stock Advisor's total average return is 1,047% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Lam Research, Meta Platforms, Nvidia, Palantir Technologies, Snowflake, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy. AI Is on Sale: 2 Stocks Worth Buying Before the Next Surge was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
9 minutes ago
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Aon Plc (AON) Fell Despite Good Results
Diamond Hill Capital, an investment management company, released its 'Large Cap Fund' first-quarter 2025 investor letter. A copy of the letter can be downloaded here. After a significant decline in April following President Trump's 'Liberation Day' tariffs announcement, markets recovered and increased consistently for the remainder of the quarter. The strategy modestly trailed the Russell 1000 Value Index in the second quarter and returned 2.87% (net) vs 3.79% for the index. The financial and consumer discretionary holdings lagged, while healthcare and communication services outperformed, boosting overall performance. To get an idea of the fund's best choices for 2025, check out its top 5 positions. In its second-quarter 2025 investor letter, Diamond Hill Large Cap Fund highlighted stocks such as Aon plc (NYSE:AON). Aon plc (NYSE:AON) offers a range of risk and human capital solutions. The one-month return of Aon plc (NYSE:AON) was 2.63%, and its shares gained 10.80% of their value over the last 52 weeks. On August 7, 2025, Aon plc (NYSE:AON) stock closed at $365.03 per share, with a market capitalization of $78.71 billion. Diamond Hill Large Cap Fund stated the following regarding Aon plc (NYSE:AON) in its second quarter 2025 investor letter: "Other bottom contributors in Q2 included Berkshire Hathaway and Aon plc (NYSE:AON). Aon is a global leader in insurance brokerage and consulting. Despite good organic revenue growth and margin expansion, investors appeared to be disappointed by the company's medium term guidance, which in turn weighed on the share price in Q2." A group of multi-cultural professionals discussing the future of insurance services in a modern office. Aon plc (NYSE:AON) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 68 hedge fund portfolios held Aon plc (NYSE:AON) at the end of the first quarter, which was 59 in the previous quarter. In the second quarter AON plc's (NYSE:AON) total revenue increased 11% to $4.2 billion. While we acknowledge the potential of Aon plc (NYSE:AON) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Aon plc (NYSE:AON) and shared the list of best global stocks to buy. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
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9 minutes ago
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Here's Why Navitas Semiconductor Shares Slumped This Week
Key Points The key to the investment case is its exciting partnership with Nvidia to develop the architecture for the next generation of data centers. Navitas investors can start thinking about a big jump in sales in 2027, and possibly profitability thereafter. 10 stocks we like better than Navitas Semiconductor › Shares in Navitas Semiconductor (NASDAQ: NVTS) fell by 14.7% in the week to Friday morning. The move comes in a week when the company released its second-quarter results. What happened to Navitas Semiconductor The earnings were in line with analyst expectations, but the magnitude of the losses may have reminded investors that it will be a while before Navitas turns profitable. In addition, the need to raise capital to support investment resulted in the sale of 20 million shares. As such, investors need to get used to the idea that the company will make losses over the next few years, and raising capital via equity sales can dilute existing shareholders' claim on future profits and cash flows. What it means to investors The points above help remind investors that Navitas is a growth stock in its early stages. Still, that's no bad thing. The case for buying the stock is based on its partnership with Nvidia to support the next generation of 800V data centers. The new data centers have a fundamentally different architecture, notably in terms of how power is converted from the grid to the IT rack, and Navitas' silicon carbide (SiC) and gallium nitride (GaN) solutions can play a key role in the power train architecture. CEO Gene Sheridan believes Navitas' technologies "can support a 100x increase in server rack power capacity for AI data centers" -- a significant enhancement and one that will help address the question of power demand to fuel AI data centers. According to the earnings release, "initial customer evaluations are complete with final engineering samples expected in Q4," and management anticipates "final supplier selections and system designs completed in 2026 in advance of volume production in 2027." That's when investors can start to think about profitability for Navitas. Should you buy stock in Navitas Semiconductor right now? Before you buy stock in Navitas Semiconductor, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Navitas Semiconductor wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $635,544!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,099,758!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 181% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. Here's Why Navitas Semiconductor Shares Slumped This Week was originally published by The Motley Fool
